Fiqh Al Zakah by Dr. Yusuf al Qardawi

A tax, as defined by taxation experts, is an obligatory due imposed on the payers and submitted to the state. Taxes are usually imposed according to the ability of the payers and regardless of the benefits the payers derive out of the services performed by the public authority with the tax proceeds. Tax proceeds are used for public expenditure to achieve economic, social, political , and other objectives of the state.1 Zakah, as defined by Muslim jurists, is a determined right imposed by God on the wealth of Muslims, to the benefit of the categories mentioned in God's Book, such as the poor, the needy, etc.

It is an expression of gratitude for God's graces, and is performed to seek His pleasure and to purify souls and wealth.

The above definitions reveal the following similarities:

1. The elements of obligation and compulsion exist in both zakah and taxes.

2. Both taxes and zakah are paid to certain public body, be it the local or national authority2 or an autonomous institution, or the public treasury.

3. In taxes, there is no reciprocity between the amount collected and services received by the payer. The payer is required to pay taxes as a member of society. Zakah is also paid, without any direct exchange, by every Muslim to the Islamic state, regardless of the benefits that the zakah payer may get from the state.

4. Zakah and, in their modern philosophy, taxes, have social, economic, and political objectives besides their financial objective.

Outside the above points of similarity, differences between zakah and modern taxes are numerous:

1. The first striking difference is the name, which has important indications. Zakah as a word means purity, growth, and blessing. The word is selected for this pillar of Islam in order to incorporate these meanings in zakah. "Tax" implies imposition, estimation, and charge. The Arabic word for tax, "Daribah", has the same indication of charge and imposition. God says "And they were covered [duribat] with humiliation and miserliness."3 Consequently, a tax is looked upon as a charge and liability. While zakah inspires purity, sanctity, and growth. It is implied that hoarding wealth without cleansing it by giving the right God imposes to the poor makes wealth a source of sin and evil, and that giving zakah -- though it reduces the wealth -- in fact brings reasons for growth.

God says "God will deprive interest of all blessing, but will give growth for deeds of sadaqat."4 "And nothing do ye spend in his cause but he replaces it." and the Messenger (p) says, "Wealth never decreases as a result of sadaqah."6

Moreover, zakah gives the feeling of purification not only for assets zakted but for the payer himself as well as the recipient, for it purifies from vanity, hatred and selfishness provides a benevolent hand to the poor. God says, "Out of their wealth take sadaqah that so thou might purify and sanctify them."7

2. The difference in nature and substance Zakah is a worship in gratitude and thankfulness to God, while taxes are a mere civil obligation. Intention is one of the conditions of zakah, since all acts of worship require intention. God says "And they have been commanded no more than this: to worship God, offering him sincere devotion."8 Zakah is always cited in the sections on worship in books of Islamic jurisprudence, and is mentioned in more than twenty places in the Qur'an. Zakah is not obligated on non-Muslim citizens of the Islamic state, since Islam does not consider it fair to obligate non-Muslims to perform an Islamic rite of worship.

3. The third difference is in ratios and minimum exempt, zakah -- as an obligation from God -- is irrevocably defined and its main features given by the Legislator.

Shari'ah determines the ratios applied on all assets, decreeing cases to which twenty percent, ten percent, five percent, or 2.5 percent rates apply. These ratios and their applicability cannot be altered by anyone or any law, regardless of changing circumstances.9 The same applies to nisabs. On the other hand, a tax is enacted by people and is always subject to change and redeterminations.

4. The difference in constancy and permanence Zakah is a fixed and permanent obligation which cannot be discontinued by any government. Even ii the government does not collect it, zakah remains an obligation on individual Muslims. Taxes can be changed, altered, or eliminated, depending on the circumstances and the decisions of legislative authorities. A tax is not permanent nor continuous or fixed.

5. The difference in dispersement of proceeds Zakah has its own dispersement. Description of its recipients is given by God in the Qur'an and explained by the tradition of his Messenger (p). No one may add a new category of recipients or eliminate recipient who deserves zakah, to the extent that individual Muslims can, in case of need, distribute zakah by themselves. The dispersement of zakah has a humanistic aim, among others, and is surrounded by humanistic acts such as exchange of prayers between payer and recipient. Furthermore, the budget of zakah must remain autonomous from the public treasury, since it is "an obligation from God."10

Taxes, on the other hand, are levied for multiple objectives, changeable with time and circumstances. The state or proper authority determines usage of tax proceeds.

6. Taxes and zakah each have different relation to the state. Payment of a tax represents a relation between the payer and the local or national authorities of the state.

If the tax collection is delayed by these authorities, the payer has no reason to pay the tax and cannot be blamed for lack of payment.

Zakah represents a relation between the payer and his Lord. It is God who gave him wealth, and the payer, out of obedience to God, performs zakah seeking God's acceptance and pleasure. If the Islamic state does not exist or does not collect zakah, individual Muslims are still required to fulfill this duty, just as prayers remain obligated even if one does not find a mosque for "zakah is the sister of prayer." Muslims are supposed to pay zakah with their souls pleased, hoping that God accepts their worship.

This is not the case with taxes.

7. Difference exists in objectives Zakah has spiritual and ethical objectives in addition to its socio-economic aims, while taxes have no such aspirations. The objectives of zakah were discussed in some detail in part six of this book. It is sufficient here to mention the verse "Out of their wealth take zakah, that so thou might purify and sanctify them, and pray on their behalf.

Verily thy prayers are a source of security and comfort for them." The Prophet used to pray for the blessings of zakah payers and ordered his commissioners to do so, to the extent that some jurists consider it obligatory. Taxes are detached from such spiritual and ethical objectives. It was even maintained by taxation specialists for a long time that taxes must have but one target: furnishing the treasury with financial resources. Only recently have scholars begun to argue for the socio- economic objectives of taxes, so that the idea of tax neutrality has become a relic of the past. But taxation scholars have not yet thought of spiritual or moral objectives of their taxation systems, while zakah established such targets fourteen hundred years ago.

8. The most important difference between zakah and taxes is the different theoretical grounds for which each is imposed. Because of its importance, this topic will be discussed in a chapter of its own.

At last, it must be emphasized that all the above mentioned differences stem from the fact that zakah is not only a tax, not a mere financial duty, but a worship as well. It is the third pillar of Islam and one of its essential rites.

It is notable that Muslim scholars throughout centuries refer to this dual meaning of zakah as a tax and a worship.11 Thus its humanistic, moral, social, economic and spiritual elements intermingle to form one institution. The author of al Rawd al Nadir quotes some scholars as saying "God imposes zakah on the wealth of the rich as a gesture of care toward their brethren, the poor, in fulfillment of the glorious right of brotherhood and in practice of love and compassion. zakah includes elements of help, support, and mutual cooperation, in spite of the fact that it is a test of obedience for the wealthy, similar to other worships God prescribes to be performed physically. It means cherishing the kindred as well as performing a worship.

Consequently, it requires intention and it can be performed through appointed representatives or agents. In as much as it is a financial obligation, the Islamic government can force owners of wealth to pay their due zakah. Zakah can be taken from the wealth of the child or the insane persons, who are otherwise not obligated to perform other worships. Because zakah is a cherishing of the poor and needy, their benefits are given priority. Because it is help to brothers and sisters, God imposes it only on the able -- the rich who own nisab. Shari'ah determines nisab and rates for each zakatable asset. Rates differ in accordance to cost and efforts involved in the process of production. Thus, the rate is ten percent on what is watered by the sky, and five percent on what is watered by animals carrying water supplies."12